Financial Crisis Squeezing Civic Budgets

11/13/2008 05:12 am ET | Updated May 25, 2011
  • Monée Fields-White and Mike Colias Crain's Chicago Business

Local governments are bracing for deeper budget shortfalls as the financial crisis hammers everything from sales tax revenue to pension funds.

The state's cash on hand in the first quarter of fiscal 2009, ended Sept. 30, plunged 75% to a record low $188 million amid slowing tax revenue, state Comptroller Dan Hynes says. Its unpaid bills ballooned 31% to $1.8 billion, also a record. That could further delay already tardy payments to vendors and crimp access to people who rely on state services such as Medicaid.

"We expect this to get worse," Mr. Hynes says. "We expect to unfortunately continue on the path of breaking these dubious records going forward."